In a note to clients, Citigroup analyst Mark Mahaney says he expects Internet search to see its first ever sequential decline in the first quarter of 2009, adding that the result will be a "drag" on Google's revenues. While Google is still expected to pull out a 2% sequential gain in revenue that quarter, Mahaney says "that assumption may now be at risk." The news isn't unexpected, considering the current economic climate, but what's interesting is the commentary accompanying MarketWatch's report of the story.
For the most part, commenters say they think Google is overpriced, especially since it's still a one-trick pony in terms of making the bulk of its revenues from search advertising. Others say Google's portfolio is less diversified than that of Microsoft and IBM, while its stock price remains far higher, making Google "clearly overvalued." And others mention Google's privacy issues as a major stumbling block to growing market share.
Far fewer say they expect Google to weather the economic storm and come out on top. Still, Google does have its defenders. One even mentions the fact that Citigroup analysts "can't predict the earnings of their own company," a good point. But the best by far is the comment attributed to beerdeid, who takes issue with Mahaney:
this analyst said google would miss last quarter and they blew earnings away[...] google isnt going anywhere. tons of cash and almost no debt and still climbing in market share.
Even so, it looks like the smart money says Google's stock price will still take hits as the downturn settles. But what do you think its future is? Let us know.
The Source Seeker blog is written by Julie Bort, editor of the Open Source Subnet site as well as the Microsoft Subnet, Cisco Subnet sites. Indeed, Bort is the Online Community Editor for all of Network World. She also writes The Microsoft Update blog. If you have an idea for a blog, or a news tip on open source, Microsoft or Cisco, contact her at firstname.lastname@example.org, 970-482-6454 or follow Julie on Twitter @Julie188.
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